UNIVERSITY OF HAWAII ATHLETICS
Audit firm: UH fiscal outlook bright
Athletics made a small '06 profit, and the debt from a $1 million loan is down to $250,000
Of all the colors the University of Hawaii has used for athletics, red was never one of them ... except when it came to the budget.
That now appears to be fading to black.
The five-year plan to move the Hawaii athletic department from the negative side of the ledger to the positive is succeeding, according to the independent audit firm of Accuity LLP, which presented its report at yesterday's Board of Regents meeting.
The BOR agreed, unanimously approving the audit of the 2006 fiscal year, ending last June 30. According to the figures presented, the athletic department showed a profit of $7,483, a dramatic turnaround from even two years ago, when the 2004 fiscal year showed a deficit of $544,900.
It is the first time since 2002 the department has shown a profit. In the 2003 fiscal year, the deficit was $2.4 million.
The athletic department also may pay off the $1 million loan given by the university in 2002 during the coming fiscal year, according to Carl Clapp, associate athletic director-administrative services. That debt is down to about $250,000.
"There were three things we wanted to do when coming in with the five-year deficit-reduction plan," Hawaii athletic director Herman Frazier said after yesterday's meeting. "One, we wanted a positive balance for the year. Two, we wanted a cumulative deficit reduction. And three, we wanted to continue our partial loan repayment to the university.
"We're right where we said we were going to be with the regents. You see the support we have from them. They understand we're heading in the right direction. There are two bankers on that board (former City Bank CEO Ronald Migita and Bank of Hawaii CEO Al Landon), so we have to be doing it clean and doing it the right way."
The reported revenue for fiscal year 2006 was $21,367,269, with $21,359,786 in expenses. Of the seven "revenue sports," Rainbow Wahine volleyball generated the greatest profit for 2005-06 ($540,111) followed by football ($434,523), men's basketball ($187,074) and men's volleyball ($29,144).
Women's basketball lost $739,535, followed by baseball ($511,276) and softball ($486,389).
Football did not compete in a postseason bowl in 2005. Profit from this year's football season is expected to increase markedly, helped by the success of the 11-3 Warriors, the payout from the Sheraton Hawaii Bowl and the $650,000 from the BCS pot.
Frazier, hired in August 2002, credited the implementation of premium-seating charges through Ahahui Koa Anuenue and the new television contract with KFVE for the increase in revenue. He also mentioned the hiring of Tiffany Kuraoka as the assistant athletic director for business operations, who has helped implement some of the "housekeeping" recommendations of the auditors.
"Looking at the budget today, we've grossed over $3 million," Frazier said. "In 2003, we were in the red by $2.4 million."
One of the creative ways has been for revenues to be channeled through the UH Foundation, which offers an interest rate for investment that is about double of the interest charged on the 2002 loan from the university.
The only line-item questioned by the BOR was the negative cash flow. Frazier explained that payout checks from the BCS, NCAA and Western Athletic Conference were usually not received until June 30 -- the end of the fiscal year -- and "we're still taking money from the university until then," he said. "But we pay them back when the checks come in."
In 2004, Frazier predicted that the department would be in the black by the end of the 2005 fiscal year, with a $1 million profit aided by $19 million in revenue.
AD talking to BCS schools to fill schedule
... And about those three football games:
That sums up where Hawaii athletic director Herman Frazier says he is with finalizing this fall's football schedule.
The Warriors have three open dates to fill, but where some would see the situation as a last-minute scramble, Frazier says the flexibility allows for bigger-name opponents and national television exposure.
"Obviously for me to be holding out this long, it has to be BCS conference schools," Frazier said yesterday. "The reason we've held out on our schedule is because we can get better teams and there are more people assisting us, like ESPN, the WAC and the other conferences.
"If I had all the dates filled, the flexibility goes away because we can't change (the opponent). But we're talking about mostly home games."
The Western Athletic Conference schedule -- which was completed in November but not yet announced -- fills eight of the Warriors' playing dates. Two nonconference games are at home against Eastern Washington on Sept. 8 and at UNLV on Sept. 15.
Frazier said the deadline for Hawaii's complete schedule is April 30.
He also said there had been a chance that Michigan State would come back on the schedule, rather than paying the $250,000 buy-out fee. That possibility is no longer on the table, with the matter of MSU not honoring the contract -- and the $250,000 buy-out clause -- being handled by lawyers.
Frazier said he didn't want to mention specific teams or conferences at the risk of jeopardizing negotiations. It was earlier reported that until the MSU matter was resolved, there was the risk of losing at least some of the $250,000.
Hawaii has also had discussions with USC about a game this season, according to a USC spokesman. The Trojans hosted Hawaii in 2003 and played the Warriors at Aloha Stadium in 2005.
UCLA is another viable Pac-10 opponent. That school generated considerable interest when mentioned as a possible opponent for Hawaii in last month's Sheraton Hawaii Bowl.
Both Boise State and Fresno State have already announced their nonconference schedules for September. The Broncos host Weber State and Wyoming, and are at Washington and Bowling Green; the Bulldogs travel to Cincinnati and Oregon, and are home against Sacramento State and Kansas State.
Cindy Luis, Star-Bulletin